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The Future of Computing Is Bigger Than the Cloud

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By Dean Alms

The importance of cloud computing is almost impossible to overstate. Already, new companies set themselves to run almost entirely on cloud software, while many established firms are adopting it selectively but aggressively.

Despite that, the future of business computing is bigger than the cloud. Not every traditional software system will prove to have an equally robust Software-as-a Service replacement, nor will every essential system prove to be worth rearchitecting for the cloud.

Now this is where the terminology gets tricky. I prefer to speak in terms of cloud software versus traditionally licensed software, as opposed to cloud software versus “on premises” software. A lot of traditionally licensed software has been run on a licensee’s premises – and by that we can mean a server room down the hall, a licensee’s owned or leased remote data center, and even one run for the licensee under contract by a managed service provider. These days, that might even include “cloud hosting” arrangements, so the terminology can be muddy. Some cloud hosting arrangements can allow you to “lift and shift” existing systems, even complex ones such as ERPs, into their environment, essentially unchanged. That can have cost and performance advantages, but despite the overlapping terminology, cloud hosting is not the same as making an application cloud native.

I predict that, 15 to 20 years from now, most large corporations will still have a substantial portfolio of traditional software they rely on, and some will depend on it for another 25 years or more. What will be nearly universal is an insistence on making every important system more cloud-like in its handling of identity and data integration. The goal will be unified orchestration of all data systems.

The middleware to tie it all together will tend to be cloud based (like Okta for single sign on identity management) or simplified into an appliance (Dell Boomi’s products for integration between traditional software and the cloud), although the technologies that have emerged so far are only the first draft of a story just beginning to be told.

I see this as a generational shift in how we think about business computing. In the early days, business computing leaders would talk about being “an IBM shop” or “a Sperry shop,” declaring their primary allegiance to the vendor that made their mainframe, the data processing hardware. Then it was, “We’re an Oracle shop,” or a “Microsoft shop,” or “an SAP shop,” where the stack of software for processing business information was deemed central. Now, rather than focusing on data processing and business processes as ends unto themselves, we’re recognizing that business agility is what really matters – and we will pull together whatever set of software and cloud services is most effective at getting us there.

Generational Shift in Technology

Generational technology shift chart. Source: Rimini Street

Instead of the user organization building systems around a hardware platform or an application ecosystem, now the computing resources – regardless of location – can revolve around the user. Isn’t that how it should be?

Managing the connections between systems, particularly between traditional applications and cloud systems and between software running in different clouds, will be just as critical as managing individual applications and technology infrastructures. Middleware technologies will be important, but it will be a long while before any of this software is smart enough that we can trust it to “manage itself” autonomously.

People will still be in the loop, determining what should be connected and how those integrations should work. Basic decisions that will have to be made include things like deciding, if two databases contain “different versions of the truth” about information such as a customer phone number, which one should we trust? Should one application always be trusted over the other, or does the record with the most current time stamp win, or should another source be queried to validate which record is correct? Connections will break, and people will fix them.

Some companies will consolidate systems around one vendor promising a common data model for multiple applications as a way of avoiding some of this complexity. However, very few large organizations will get away with making a wholesale commitment to one vendor, simply because no technology vendor does everything equally well. Agility, the business imperative for the next generations of solutions, will be too important to sacrifice for a single vendor solution. The flexibility to add, drop, change, and integrate cloud solutions is a large part of what made them attractive in the first place.

Instead of the single vendor suite, those seeking simplification will look for pre-integrated cloud solutions that work well together. Because rival vendors don’t always “play nice” with each other, cloud services to broker connections between all the software and services that are vital to your business will be particularly important. Again, Okta stands out as a strong early entrant.

Even those companies that bet heavily on the cloud will wind up working with multiple cloud vendors and integrating their applications. They will find themselves sticking with a few traditional software applications (including those hosted in the cloud) because no acceptable cloud-native alternative exists.

To fit well into this new era, traditional software will have to take on some of the positive characteristics of cloud software. This will be tricky for organizations trying to extend the life of, for example, an established ERP system that still serves the company well. An example is an ERP with better support for the vertical industry where the company operates than any cloud equivalent on the market. It may contain customizations, made over many years, that support the company’s unique business model. Such tried-and-true enterprise applications can remain useful for years or decades after vendor support for them evaporates.

Moving a traditional enterprise software application to the cloud may be completely impractical. Or it may not be a priority. Particularly with ERP, the strongest trend so far is not switching from traditional software to the cloud but supplementing the ERP with cloud software and moving away from the assumption that all important functions must be packed into a single suite. In what Gartner calls a “postmodern ERP” strategy, you might make one choice for core functions like accounting and inventory management but a different choice for functions that are more novel and innovative and “come to market first” in the cloud. For example, a retailer might provide store associates with a mobile app that is cloud based but connects back to the ERP, hosted by the licensee or in the cloud, for real-time inventory and order processing.

For years, technology evangelists have spoken of “orchestration” as the way to make many software systems work in concert. Like a good conductor, a CIO should be able to command all systems to play together in harmony. This vision of an era of orchestration has been bandied about before in terms of object software and service-oriented architectures, but with the cloud it’s becoming real.

Yet for many organizations, the best rendition of the music will require instruments not made for the cloud to also play their part.

Recently 900 global IT executives participated in a research study on “The State of IT Innovation.” Join our webinar on July 26, to learn about their resulting top priorities and challenges, and ways you can keep IT innovation moving forward.

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About Dean Alms

Dean Alms has been defining corporate and product strategy in technology-based companies for more than 25 years, primarily for enterprise software and service providers. He is known for defining bold visions, compelling strategies and innovative products. Mr. Alms is a speaker at industry events, author of white papers and blogs, and a trusted source of ideas and innovation for technology-based organizations. Heading up Global Product Strategy for Rimini Street, he is responsible for defining the company vision, strategy and roadmap for support services as clients aggressively transition from on-premises packaged software to a hybrid infrastructure.